Forget McMansions: To compete with repos, builders think small

Home, sweet single-family home, is getting smaller as big national home builders compete with foreclosure pricing.

In corporate suites, builders call the trend "back to basics." It comes in the wake of a housing boom that saw thousands of buyers gorge on 3,500-square-foot houses and bigger with easy financing.

Back to basics is about generating cash flow to stay in business, builders say. It means making prices low enough to woo first-time buyers away from bank repos.

In the Sacramento region, bank repos account for two-thirds of home sales. Half the 1,900 resale houses sold in December in Sacramento County and the city of West Sacramento cost less than $180,000, according to the Sacramento Association of Realtors. By comparison, the median price of a new home in Sacramento County in December was $272,000, reported researcher MDA DataQuick.